1. Point #1: Prices Matter 4

2. 4
US Cocaine and Heroin ED Mentions Inversely Related to (Purity-Adjusted) Prices

3. 4
Price Raised to a Constant Elasticity Can Explain Most Variation in ED Mentions

4. High School Seniors’ Marijuana Use Inversely Correlated with Price4

5. Price even explains shorter-term variations in use & harm5
Price even explains shorter-term variations in use & harm

6. Heroin Overdoses in Victoria5
Heroin Overdoses in Victoria

7. Little Change in “Raw” Price5
Little Change in “Raw” Price

8. Big Change in Retail Heroin Purity5
Big Change in Retail Heroin Purity

9. So Purity-Adjusted Price Soared5
So Purity-Adjusted Price Soared

10. Which Can Explain Variation in Ambulance Call-Outs5
Which Can Explain Variation in Ambulance Call-Outs

11. 4
Point #2: Commercial Legalization Drives Prices Down Radically (and it pushes potency up)

12. 12 Ways of Liberalizing Policy on Cannabis Supply
Very few monitored for-profit licensees
Communal own-grow & distribution
Govt. operates the supply chain
Non-profit organizations
Repeal-only of state prohibition
Decrim but not legalize own grow
Allow adults to grow their own
Prohibit but
decrease sanctions
Retail sales only (“Dutch model”)
Public authority (“Near monopoly”)
For-benefit companies
Standard commercial model

13. The U.S. & Canada Are Making an Irreversible Leap
Communal own-grow & distribution
Govt. operates the supply chain
Non-profit organizations
Very few monitored for-profit licensees
Repeal-only of state prohibition
Decrim but not legalize own grow
Allow adults to grow their own
Prohibit but
decrease sanctions
Retail sales only (“Dutch model”)
Public authority (“Near monopoly”)
For-benefit companies
Standard commercial model

14. Retail Price Declines in WA State
Cost has fallen below $1 per hour of intoxication for a naïve user.

15. Price Declines at the Wholesale Level
From Cannabis Benchmarks
Decline averages about 2.5% per month, compounded.

16. Potency Has Risen Over Time
And extracts are often 70% pure

17. Production Costs Will Fall Further

18. Simple Math of Legal Cannabis Production
Farm gate price has already fallen from $6,000 per pound to $1,000 per pound
Coul it fall to ~$10 per pound?
Cannabis yields ~1,000 pounds per acre
Production cost for tomatoes is $10,000 per acre
That $ $0.03 per gram, or $ $0.02 per joint
Current retail price is $10 per gram

19. Policy Affects Drug Use.

20. The Number Reporting Marijuana Use in the Past-Year Has Doubled

21. The Number of “Current” (Past-Month) Users Has Nearly Tripled

22. The Number of Days of Use Has More Than Quadrupled

23. The Number Using Daily or Near-Daily Is Nearly Nine Times Greater
So the answer to the question “How much has US Marijuana use increased since its nadir around 1992?” is “It depends.” It depends on the measure used.
And precisely because the answer to important – and even quite elementary – questions concerning patterns of drug use and drug-related harm depends crucially on the measure employed, it is essential that we start investing more in measures that capture the intensity of use, and not content ourselves with measures of the number of people who report having used within the past-year or past-month.

24. Daily or Near-Daily Use Is Common

25. Intensive Use Approaching that of Alcohol

26. Point #3: Fentanyl Drives Opioid Prices Down Radically4
Point #3: Fentanyl Drives Opioid Prices Down Radically

27. Fentanyl & Production Cost for Wholesale Drug Dealers
Fentanyl costs about 1/16th as much
$5,000 per kg for fentanyl that is highly pure
$20,000 - $60,000 per kilogram for ~40% pure
Fentanyl is about 16 times more potent
Heroin has a MME of ~4-5
Fentanyl has a MME strength of
So fentanyl is about 16 * 16 = 256 times as CE
In terms of Moore’s Law, that is like 8 generations’ difference in computers
Would you rather use a cell phone made in 2018 or 2006?

28. Shift from PO to heroin and fentanyl? but …9
75-80% of those dying of heroin & fentanyl started their addiction career with prescription opioids.

29. Summary Price matters Price follows production cost in the long run
Two big contemporary drug issues can be seen as altering production costs
(Legal) Cannabis
Fentanyl
Studying suppliers’ is useful